Explaining changes in poverty rates. A methodological framework with an application to Germany

Haupt, Andreas; Nollmann, Gerd

Abstract:

The article discusses unconditional quantile regression as an instrument of multivariate analyses of poverty rates. Using data from the German Socio-economic Panel (GSOEP), the authors discuss in what way different types of private households and other variables have contributed to the rise and fall of the 10th and 50th percentile of the income distribution between 1992 and 2011, resulting in increases and decreases of the relative income poverty rate. Social security pensions and demographic factors strongly muted the increase of poverty rates whereas young households, zero earners and parttimers contributed to growing poverty. Disentangling contradictory effects at different quantiles of the income distribution, it becomes clear that so far, the rise of poverty has hit only the tip of an iceberg.